Revving Up: Two-Wheeler and Tractor Markets Gear for Growth in India

Sales of two-wheelers in India are predicted to see a growth rate of 6-9% in FY26, compared to the previous fiscal year. This anticipated increase is largely attributed to the recent reduction in GST rates, which is expected to enhance affordability and stimulate demand, according to ratings agency ICRA.

In August 2025, domestic wholesale volumes experienced a 7.2% year-over-year increase, totaling 18 lakh units, as manufacturers maintained healthy shipments in anticipation of the festive season. However, retail sales saw a more modest increase of 2.2% YoY, constrained by excessive rains and consumer hesitation linked to the GST rate reduction, although improvement is anticipated as the festive season approaches.

The tractor sector is also showing robust growth, with a significant 28.2% YoY increase in wholesale volumes in August 2025. The combination of favorable monsoon conditions and a recent GST rate cut on tractors to 5% is expected to further boost demand. Meanwhile, the industry is preparing for potential pre-buying ahead of the implementation of TREM V emission norms in April 2026.

(With inputs from agencies.)